Prominent Australian deal-maker David Williams has criticized the Albanese government’s proposed tax reforms, warning they could inhibit innovation and hinder economic growth. Williams, known for his role in rescuing Tassal from receivership and returning Vegemite to Australian ownership, expressed concern over the government’s plan to introduce a more complex capital gains tax (CGT) regime with carveouts for start-ups.

The government intends to allow businesses with an annual turnover of up to $10 million to access a 50 percent discount on CGT upon the sale of active assets, an increase from the current $2 million threshold. Additionally, Labor has proposed exempting “innovative start-ups” with turnovers up to $50 million from the new CGT rules, though the specifics of this exemption are still being finalized. The bill is expected to be presented to the Senate within the next two weeks.

Williams argued that while the government aims to protect the environment—using the metaphor of avoiding “kicking a hole in the ozone layer”—it is instead causing greater harm to Australian innovation. He suggested that the proposed tax structure shows a “fundamental lack of understanding about how long it takes to build a company and bring a product to market,” potentially encouraging some companies to relocate offshore and reducing domestic employment opportunities.

“This will have immediate negative impacts, but the long-term effect will be a void where growth and innovation should be,” Williams said. He pointed to successful Australian companies such as Medtronics, Cochlear, Resmed, Clarity, and Atlassian as examples of innovation the government risks undermining.

The government has emphasized its intention to support start-ups and small businesses through the proposed CGT changes, but Williams’ critique highlights ongoing debate about the impact of fiscal policy on innovation ecosystems in Australia. The design and implementation of carveouts for innovative firms remain under negotiation as the legislation advances through Parliament.